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Full recovery in consumer durables will be long drawn affair: Analysts

Analysts expect companies to shift focus to online platform in order to boost sales in these Covid-19 impacted times

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Markets | consumer durable stocks | Consumer Durables

Puneet Wadhwa  |  New Delhi 

Consumer goods companies, hike in consumer goods, crude oil prices, crude oil, metal prices, World Bank, fast movng consumer goods, FMCG, consumer durables, macro econmics, rupee depriciation, Indian currency, dollar price, commodity price, goods and
According to Goldman Sachs, e-commerce growth in India is expected to rise up to 33 per cent in 2021

Even as companies prepare for the festival season in the hope of Dussehra and Diwali triggering a sales uptick, analysts caution that recovery in this segment will be a long-drawn-out affair. Investors, they suggest, should put in money from a 12–18 month perspective — that too on a decline.

A note by suggests demand and penetration levels should also improve as India’s per capita gross domestic product growth trajectory picks up. “Our analysis indicates that the air conditioner market can record around 8-10 per cent compound annual growth rate over FY20-FY25F, despite the Covid-19-impact, touching penetration levels of 18 per 100 households, which is nearly half of what China had in 2005-06. The growth in refrigerators/washing machines is likely to be lower at 6-8 per cent and least in the fan segment, given its already high penetration levels,” wrote Siddhartha Bera and Kapil Singh of in a co-authored September 14 report.

That said, analysts now expect companies to shift focus to online platforms to boost sales in these Covid-19-impacted times. According to Goldman Sachs, e-commerce growth in India is expected to rise up to 33 per cent in 2021, up from 18 per cent growth in 2020.

“As demand deepens and widens across the smaller within the hinterlands, companies need to re-evaluate market strategy to identify and prioritise new growth centres. Success within micro-will, however, depend on the ability of players to develop robust sales channels and operating models to reach customers in an efficient and cost-effective manner,” says an August note by PwC.

chart

Long road ahead

Given that Covid-19 has reached the hinterland and urban India is grappling with job losses and paycuts, analysts expect recovery in the segment to be slow and a long-drawn-out affair. “Lockdowns resulted in wage cuts and layoffs in the April–June 2020 quarter and many firms also deferred pay hikes and variable pay. If the wage scenario improves in the second half of FY21, consumption demand should benefit,” says the note.

The uptick in stocks at the bourses over the past few months, say analysts, has mostly been on account of an upmove in the mid- and small-cap segments, where most of these counters get classified. Moreover, the hope of demand recovery, led by higher consumption in the rural belt, has aided sentiment, they say.

“Rural economy is not a sufficient enough driver to pull us back into a positive growth rate — we need a broader urban recovery for that. Rural, which is largely dependent on agricultural income, will only serve as a downside protection — and in general, perhaps support around 40-50 per cent of the mix of demand for various categories in consumption for front-line companies,” cautions Venugopal Garre, India strategist at Bernstein.

G Chokkalingam, founder and chief investment officer at Equinomics Research & Advisory, suggests investing in these counters from a 12–18 month perspective — that too on a decline. “I think the next two quarters will be bad for consumer durables firms as Covid-19 cases continue to surge. People will only spend on essentials and defer purchase of discretionary items. A full-blown recovery in sales of companies and the stocks at the bourses are still some time away,” says Chokkalingam.

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First Published: Tue, September 15 2020. 09:54 IST
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Full recovery in consumer durables will be long drawn affair: Analysts

A Quarter Of U.S. Energy Output Offline As Hurricane Advances
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A Quarter Of U.S. Energy Output Offline As Hurricane Advances

A Quarter Of U.S. Energy Output Offline As Hurricane Advances

More than a quarter of U.S. offshore oil and gas production was shut and export ports were closed on Tuesday as Hurricane Sally stalled just off the U.S. Gulf Coast, pelting the region with heavy rains.

  • Last Updated: September 16, 2020, 4:18 AM IST

HOUSTON: More than a quarter of U.S. offshore oil and gas production was shut and export ports were closed on Tuesday as Hurricane Sally stalled just off the U.S. Gulf Coast, pelting the region with heavy rains.

Sally weakened on Tuesday to a Category One hurricane with sustained winds of 80 miles per hour (128 kph), moving at a pace that threatened historic and life-threatening flooding from Mississippi to Florida, the U.S. National Hurricane Center said in a late day update https://www.nhc.noaa.gov/text/refresh/MIATCDAT4+shtml/152038.shtml?.

The storm plowed through prime U.S. offshore production areas and was meandering on a path toward Alabama and the Florida Panhandle, sparing New Orleans and some larger Gulf Coast refineries from its winds and rain.

Royal Dutch Shell said it shut its Appomattox oil platform about 80 miles off the coast of Louisiana, joining BP , Chevron Corp and Equinor in closing facilities less than one month after Hurricane Laura knocked about 1.5 million barrels per day of oil offline temporarily.

Nearly 500,000 bpd of offshore crude oil production and 28%, or 759 million cubic feet per day (mmcfd), of natural gas output were shut in the U.S. Gulf of Mexico on Tuesday, according to the U.S. Interior Department.

U.S. crude oil futures rose nearly 3% and gasoline futures climbed 2.3% on Tuesday on the hurricane-related oil production and refinery shut-ins despite demand losses from the COVID-19 pandemic.

The nation’s sole offshore terminal, the Louisiana Offshore Oil Port (LOOP), stopped loading tankers on Sunday, while ports from Biloxi, Mississippi, to Pensacola, Florida, were closed. Ports along the Mississippi River began to reopen late Tuesday with restrictions. The closings will cut roughly 307,000 bpd of crude and 411,000 bpd of refined products, according to Kpler data.

As of 4 p.m. CDT (2100 GMT) on Tuesday, Sally was about 85 miles (135 km) south of Mobile, Alabama, and crawling toward the northwest at 2 mph (3 kph). The crawling advance threatened to inundate the region.

Refiners in the region have wound down operations. Phillips 66 shut its Alliance oil refinery, which processes 255,600 bpd at a site along the Mississippi River on the coast of Louisiana.

Shell cut production to minimum rates on Monday at its 227,400-bpd Norco, Louisiana, refinery, but planned to keep a Mobile, Alabama, chemical and refinery plant operating with a skeleton crew.

Murphy Oil Corp said it was beginning to restore production at its eastern-most Gulf of Mexico oil platforms, and oil-giant Equinor said it expected to return workers to its Titan platform on Thursday.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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Full recovery in consumer durables will be long drawn affair: Analysts

Govt doctors go on strike for 5 days | Hubballi News - Times of India

Govt doctors go on strike for 5 days

Hubballi: Government doctors working in health facilities run by the health and family welfare department have gone on a five-day strike from Tuesday. However, the doctors continued to attend to patients. The strike was launched to demand for revision of pay as per the Central Government Health Scheme (CGHS).
The doctors said that they will not submit any reports to the higher officials, and will not attend meetings chaired by these officials, until their demands are fulfilled.
As many as 118 doctors from Dharwad took part in the protest. The doctors launched the protest under the banner of Karnataka Government Medical Officers Association (KGMOA).
The Dharwad branch doctors in a memorandum submitted to the deputy commissioner, said that they have been working round-the-clock to contain the spread of the novel coronavirus, without taking a break for a single day.

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    Full recovery in consumer durables will be long drawn affair: Analysts

    Auto driver booked for molesting married woman | Vadodara News - Times of India

    Auto driver booked for molesting married woman

    Vadodara: An auto-rickshaw driver was booked for allegedly molesting a 32-year-old married woman in Padra on Monday.
    The woman told police that the accused Manojkumar Panchal followed her from her workplace to her home in his auto-rickshaw on Monday evening. While reaching near her home, Panchal asked her to stop. The woman told him not to follow her, but he said that he likes her and wants to have a relationship with her. The woman said that Panchal threatened to commit suicide if she would not leave her husband and live with him.
    As the woman was about to leave without paying much attention to Panchal, he allegedly molested her and slapped her a couple of times. The woman got scared and went to her husband. Panchal again followed her for a distance and then went away. After informing her husband, the woman lodged a complaint at Padra police station.

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      Full recovery in consumer durables will be long drawn affair: Analysts

      Take early symptoms seriously to avoid hospitalization, say docs | Nagpur News - Times of India

      Take early symptoms seriously to avoid hospitalization, say docs

      Nagpur: Due to weather changes, many people are experiencing symptoms similar to Covid-19 these days and panicking. Though every fever and every throat infection is not Covid-19; it is the first thing that hits the mind. The first person most of us visit is our family physician. TOI spoke to some family physicians in city for their advice.
      Dealing with hundreds of Covid-like cases daily, these doctors are first-responders for the people and they have important observations about Covid-19 pattern in city.
      “Covid-19 starts with fever in symptomatic patients. Most patients visiting my clinic experience fever for a day or two and suspect it as Covid-19. After that the fever recedes and patients think it wasn’t Covid-19 but some other illness,” said Dr Abhishek Sambhre, whose clinic is in Rameshwari area.
      “Covid provides this false sense of relaxation for two-three days. I advise people to use this period to get themselves tested. Most refuse as they don’t have any symptom,” he said. Later, symptoms like cough and soreness in throat begin. If ignored at this stage, the condition may deteriorate.
      According to Dr Sujata Bhagat, whose clinic is in Manewada, people are reluctant to get themselves tested due to stigma and fear. “Many still fear isolation, hospitalization, and hence avoid tests. If you test early at asymptomatic or mild symptomatic stage, you can avoid hospitalization,” she said.
      “Ignoring the symptoms for more than seven-eight days has landed many patients into trouble. Youngsters and healthy people get recovered with their immunity, but they spread infection to vulnerable people like elderly,” she added.
      Doctors also highlighted need of following home isolation and physical distancing. “Even if you have mild symptoms, just isolate yourself from family members to safeguard them. Especially, don’t come into contact with senior citizens and those having diabetes, hypertension, kidney and asthma,” said Dr Ejaz Sheikh having clinic in Jaripatka.
      “I have seen many young patients recovering in two-three days, but their elderly family members got serious infection in next two weeks,” he added.
      What happens with you?
      Day
      Physical condition
      Action to be taken
      1
      Fever
      Monitor your fever, isolate youself
      2
      Fever
      Visit family physician in clinic/hospital
      3
      No Fever
      Monitor your vital parameters/isolate yourself
      4
      No fever at all
      No. you should go for test/ continue isolation
      5
      Mild cough
      Go for test do not ignore
      6
      Mild cough
      Best time to test yourself as per WHO guidelines
      7,8, 9
      Cough increases
      Do not panic, but go for test and take medicines
      10
      Breathing problem
      It’s never too late, go for test
      11
      Tested Positive
      No need to panic, you have all chances to recover
      12
      SpO2 down
      You need hospitalization, but early test would have saved you from this

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        Full recovery in consumer durables will be long drawn affair: Analysts

        Centre asks Karnataka, Andhra Pradesh, Maharashtra and Delhi to ramp up testing | India News - Times of India

        Centre asks Karnataka, Andhra Pradesh, Maharashtra and Delhi to ramp up testing

        The Centre has asked Karnataka, Andhra Pradesh, Maharashtra and Delhi to ramp up testing as the positivity rate in these states continues to be significantly higher than the national average of 8.4% .
        An analysis of daily average of new cases week-on-week in the top five states showed that Maharashtra and Uttar Pradesh were adding more cases, while numbers had stabilised over the last three weeks in Karnataka and Andhra Pradesh. There were also initial signs of decline in Tamil Nadu, the government said.
        The positivity rate was highest in Maharashtra at 21.5% and the state has so far tested around 51.73 lakh samples. Andhra Pradesh and Karnataka had positivity rate of over 12% whereas Delhi had a rate of 8.9%. A sustained high positivity rate points to not only the need for more testing but also carrying out contact tracing and isolation. Laxity towards measures like using masks is also fuelling the pandemic.
        “The number of tests conducted by states has to be seen in tandem with the positivity rate reported by them. If in spite of largescale testing, a state is seeing higher positivity, it needs to ramp up testing further,” health secretary Rajesh Bhushan said.
        Overall, India has conducted 5.8 crore tests so far, while the number of infected cases has touched almost 50 lakh and deaths have hit 81,331. India’s 58 million tests are behind the US with 92 million and China with 160 million. Its test per million population average is 42,000.
        The Centre again pointed to the infection burden being concentrated in a few states. Five states — Maharashtra, Karnataka, Andhra Pradesh, Uttar Pradesh and Tamil Nadu — continue to account for 60% of total active cases.
        Four states — Maharashtra, Karnataka, Andhra Pradesh and Uttar Pradesh — have more than 50,000 active cases. On the other hand, 18 states have 5,000-50,000 active cases, while 14 states and UTs have less than 5,000 active cases.
        Similarly, for deaths, Maharashtra and UP are seeing rise in average daily deaths week-on-week, while Karnataka is showing some stability. Andhra Pradesh and Tamil Nadu have shown early signs of decline in daily deaths over the last three weeks.

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          Full recovery in consumer durables will be long drawn affair: Analysts

          Toyota nixes new car, factory plans, blames ‘prohibitive’ tax rates - Times of India

          Toyota nixes new car, factory plans, blames ‘prohibitive’ tax rates

          NEW DELHI: Japanese auto major Toyota is suspending plans to launch new cars in India and is also putting a halt to fresh factory investments as it blames "prohibitive" taxes on vehicles for depressing consumer demand, leaving automakers with high costs and unutilised and idle capacities.
          The tax rates, the company says, has blunted the ease of doing business in India and has made vehicles expensive for customers. Also, with lower demand, companies have failed to utilise factory capacities and harness the underlying business potential.
          "Don’t treat this (auto industry) as a sin good. This is a sector that generates a lot of employment, goodwill, and lots of export potential," Shekar Viswanathan, vice-chairman of Toyota Kirloskar Motors, told TOI.
          Viswanathan said it is unfair to load a customer who is already paying personal income tax with high taxation on goods such as cars. "…Why should s/he not benefit from a lower tax rate. There will be more people to buy. I am batting for the consumers."
          Toyota runs its business in India in partnership with the Kirloskar family, the latter holding a minority stake in the company.
          Viswanathan said that the scope for expansion remains challenging. "Unless tax rates come down, demand will not go up. It’s a simple equation. If it (demand) goes up, then only can we think of a new factory."
          Asked whether the company — which is taking models from Maruti to meet its requirements — will launch new cars under its own brand, he said it is not possible in the present circumstances. "The launch of a new car is prohibitively costly — to develop a new platform, launch it, and then get volumes to defray costs, including for technology development. It’s a huge risk."
          Viswanathan, who has often been vocal about the industry’s demand for reduction of taxes, said that while the companies make only about 7-10% through sale of vehicles, the government makes as much as 50% on bigger vehicles (through GST and additional levies) and over 28% on smaller cars.
          "This is a very complex subject. Investors such as ourselves cannot take a decision to expand unless it becomes more sensible to do business… ease of doing business is also tied to the tax rates."
          Toyota has two plants in India around Bengaluru, and while the first plant (annual capacity of one lakh vehicles) is fully utilised, the second, and bigger, plant is utilising only around 15% of the installed capacity of 2.1 lakh units.
          "We are barely making 30,000-35,000 vehicles in the second plant. So, there is no rational of expanding to a third plant. Tell me how to expand. Until I can show 75% capacity utilisation, how can I expand. Can anyone do it?"
          Despite its over-two-decade-long presence in India, Toyota has not been able to crack the Indian market and its volumes have been struggling. Its market share in August this year stands at a poor 2.6% in the passenger vehicles category against 5.7% recorded in the same month of last year. This despite the fact that other companies such as newcomers Kia Motors of Korea and MG Motors of China have managed to get numbers. Even older players like Maruti Suzuki and Hyundai have boosted their share.
          Viswanathan said that if demand comes back, the company will gain and only then can it think of expansion. "If the market is there, factories will come. The government must take a look at GST rates to spur growth."

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            Full recovery in consumer durables will be long drawn affair: Analysts

            2 Giants-Seattle Games Off Due To Smoky Skies, Moved To SF
            1-MIN READ

            2 Giants-Seattle Games Off Due To Smoky Skies, Moved To SF

            Members of T-Mobile Park's custodial and facilities team pause to watch the action during the first baseball game of a doubleheader between the Seattle Mariners and the Oakland Athletics, Monday, Sept. 14, 2020, in Seattle. (AP Photo/Ted S. Warren)

            Members of T-Mobile Park's custodial and facilities team pause to watch the action during the first baseball game of a doubleheader between the Seattle Mariners and the Oakland Athletics, Monday, Sept. 14, 2020, in Seattle. (AP Photo/Ted S. Warren)

            The twogame series between the San Francisco Giants and the Mariners in Seattle that was scheduled to start Tuesday night was postponed because of smoky skies caused by the West Coast wildfires.

            • Last Updated: September 16, 2020, 3:18 AM IST

            SEATTLE: The two-game series between the San Francisco Giants and the Mariners in Seattle that was scheduled to start Tuesday night was postponed because of smoky skies caused by the West Coast wildfires.

            The teams will now play Wednesday and Thursday at Oracle Park in San Francisco, with game times to be determined.

            The announcement came as forecasters called for smoke to reach very unhealthy levels in Western Washington through at least Thursday.

            Both teams had a scheduled day off Thursday that allowed them to avoid playing a doubleheader on Wednesday.

            Some players complained about smoky conditions Monday night after the Mariners split a doubleheader with the Oakland Athletics. Smoke conditions during the games reached a level of very unhealthy on the air quality index, even with the T-Mobile roof closed.

            ___

            More AP MLB: https://apnews.com/MLB and https://twitter.com/AP_Sports

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            Full recovery in consumer durables will be long drawn affair: Analysts

            Bizmen hail govt decision on self certification fee waiver | Ludhiana News - Times of India

            Bizmen hail govt decision on self certification fee waiver

            Ludhiana: An important online meeting of prominent city businessmen was held with chief secretary , Punjab, Vini Mahajan on Tuesday. The agenda of the meeting was to discuss the new changes in the labour laws of the state and take feedback of the businessmen. VK Janjua, additional chief secretary (labour), too was present in the video conferencing.
            In another revolutionary step taken in terms of labour reforms for industry the state government has decided to waive the hefty fee applicable on factories opting to adopt system of self certification, which means that no officials from any labour department will now visit the factories on pretext of checking of compliance of labour laws if the unit has done self certification.
            Rahul Ahuja, chairman of Confederation of Indian Industry, Punjab, said, “We held a detailed discussion with the chief secretary on the subject of the recent changes in the labour laws in Punjab. During the meeting all changes were discussed and feedback of the business community was also taken. Everyone has termed these changes as revolutionary as these were need of the hour. One of the biggest changes which has come into effect in Punjab is the concept of self certification in compliance with labour laws. Though this provision existed earlier as well but a bank guarantee of Rs 5 lakh was applicable on the factories opting for self certification. In the new changes implemented by the government the fee has been fully waived.”
            Ahuja added, “Another big step taken towards relaxations of labour laws is that the factories where continuous processes or heat process are involved, can now give their workforce alternate offs and run the work shift on national holidays. Earlier, in case of any national holiday it was mandatory to observe a holiday in the industrial unit and the factories where the continuous process requires even 24 hours to start or end were at receiving end as there was huge losses involved. These units will now be able to operate on national holidays if such a process is going on and they can give the off of this day to their labour on another day. The criminal proceedings under the labour laws too have now been done away with, which means now any offence committed by the factory owner will only be compoundable.”
            According to Amit Juneja, chairman of CII, Ludhiana, “The biggest change so far has been introducing the fixed term employment system, which means if you want to hire a worker for a week, 15 days or 30 days you can sign a contract and do it, earlier it was impossible to do so. Another great move is the giving flexibility to the micro small and medium enterprises (MSME) to either comply with the model code of conduct as per norms or draft its own code of conduct.”

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